HealthFirst board ties up loose ends for Southland clinic

mmeehan1@herald-leader.comJune 26, 2014 


    Oct. 1, 2010: A $11.7 million federal grant for a new public health clinic was approved for HealthFirst Bluegrass.

    June 21, 2012: HealthFirst signed a lease for two buildings at 496 Southland Drive with Lexington developer Ted J. Mims and co-owner Greg McDonald.

    April 9, 2013: HealthFirst announces that the U.S. Health Resources and Services Administration, or HRSA, has set a April 28 deadline to resolve issues between the Lexington-Fayette County Board of Health and HealthFirst or lose a $2.4 million operational grant. The major point of contention? How millions in local health tax money is split between the Board of Health, or BOH, and HealthFirst. The BOH votes to cut HealthFirst's $1.2 million share by half.

    April 18, 2013: Tom Burich, chairman of the HealthFirst building committee, sets a 30-day deadline to end the Southland project unless financial help is received from the community or a charitable foundation.

    May 1, 2013: HealthFirst votes to stop spending money on Southland Drive after an internal audit showed a deficit of $515,000, $300,000 more in debt than reported the previous week. HealthFirst executive director William North, citing an April 26 Herald-Leader editorial calling for a HealthFirst audit, submits documentation to State Auditor Adam Edelen.

    May 9, 2013: BOH restores cuts in local health tax dollars to HealthFirst.

    May 14, 2013: Lexington Mayor Jim Gray and Edelen hold a news conference to announce a review of the land deal that brought the HealthFirst clinic to Southland.

    May 16, 2013: With an auditor's report pending, HealthFirst's board votes unanimously to continue with the Southland project. Burich is given a standing ovation at a HealthFirst meeting.

    July 17, 2013: HealthFirst cuts 21 jobs and reorganizes staff.

    July 25, 2013: The state auditor finds that HealthFirst Bluegrass pre-selected developer Mims as project manager and created a conflict of interest that could jeopardize the $11.7 million federal grant, and that HealthFirst's financial viability is threatened by cash-flow problems.

    Aug. 5, 2013: In a guest commentary in the Herald-Leader, Burich and board chairman T.A. Lester say that the auditor's report showed no wrongdoing by HealthFirst and that concerns about the project are the result of a "fictional narrative."

    Aug. 13, 2013: BOH chairman Scott White calls HealthFirst's public response to the audit "delusional." The BOH asks HealthFirst for a plan to deal with issues raised in the audit.

    Aug. 15, 2013: HealthFirst, for the second time in six months, threatens to pull the plug on the project without financial support from the community.

    Aug. 18, 2013: Health care advocates say HealthFirst budget cuts and policy are keeping poor women from getting breast and cervical cancer screenings.

    Aug. 22, 2013: Citing financial instability and poor management of HealthFirst, the BOH asks that North be removed from his job. The HealthFirst board of directors, meeting down the hall at the same time, vote unanimously to retain North.

    Sept. 9, 2013: BOH again withdraws tax dollars from HealthFirst, votes to find new partner to build $11.7 million clinic.

    Sept. 20, 2013: North and four board members of HealthFirst resign. Dr. Steve Davis, a former deputy director of the state department of public health, is appointed executive director of HealthFirst. A new board is created.

    Sept. 23, 2013: HRSA officials ask for information about Mims' contract.

    Dec. 9, 2013: HealthFirst votes to renegotiate the contract with Mims and McDonald.

    Feb.27, 2014: New contract is approved by the HealthFirst board.

    July 2014: Construction to begin by end of month.

    Compiled by Mary Meehan

After years of waiting and months of negotiation, the HealthFirst Bluegrass board unanimously approved a motion that ties up the last financial loose ends on a $11.7 million clinic on Southland Drive.

HealthFirst executive director Dr. Steve Davis said that by the end of July a promised neighborhood meeting would take place and construction would begin.

"We've reached a point where we can move forward," said board member Geoff Reed.

Reed said an "incredible amount" of work had gone into negotiations with the owners of the property, the federal government and HealthFirst officials, which began in earnest in December.

The approved contract allows HealthFirst to buy the property instead of lease it, reducing the cost of the original deal by $709,300, Davis said. The $2.5 million purchase price will be financed by the landowners, Greg McDonald and Ted J. Mims, Davis said. There will be no down payment, and HealthFirst's monthly payments are reduced by $23,475, to $15,000, said Davis.

There is also a savings of $15,000 a month because as construction contractor Congleton-Hacker takes over, the services of Mims, as project manager, aren't needed. Mims has been paid $15,000 a month.

The long-awaited construction project stalled in January 2013. At that time, then-executive director William North said an anonymous complaint forced HealthFirst to create a historic and environmental assessment of the property. State Auditor Adam Edelen issued a report raising questions about the original land deal, the hiring process for Mims and the financial viability of HealthFirst. North and four members of the HealthFirst board resigned in September, and Davis took the reins.

HealthFirst, a nonprofit, serves about 15,000 patients a year, many of them poor, at a clinic at 650 Newtown Pike. A clinic will remain on the north end of town, Davis said, but HealthFirst officials are looking for a new location, which should be made public within a few weeks.

Mary Meehan: (859) 231-3261. Twitter: @bgmoms. Blog:

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